The market in a minute: Taking a breath

OliverPursche

Oliver Pursche is the Chief Executive Officer of New York-based Bruderman
Brothers, LLC a registered broker/dealer and Bruderman Asset Management, LLC, a
registered Investment Advisor overseeing over $1 billion in client assets.He is
a member of the Harvard Business Review Advisory Council and a monthly
participant in the New York Federal Reserve Bank Business Leaders Survey. As a
frequent contributor to CNBC and Fox Business and a regular columnist for Forbes
and The Wall Street Journal’s MarketWatch, he is a recognized authority on
global affairs and investment policy. He is the author of “Immigrants: The
economic force at our door.”

Friday's anemic market action and slight selloff is likely an indication of buyer exhaustion, at least for now. As earnings season comes to an end, investors will refocus their energy on economic data, which unfortunately is difficult to interpret given the severe weather that has plagued most of the nation so far this winter. Year to date, stocks stand near their all-time highs, while commodities and bonds have proven surprisingly resilient posting strong gains so far.

The trade

I expect stocks to trade in a tight range this week, with a slight downside bias. Should economic news prove to drive increased market volatility, writing covered calls — especially on large U.S. multinationals in the consumer and industrial sectors could prove fruitful.

For instance, Kellogg
K, +0.73%
April 65 Calls, Procter & Gamble
PG, -0.29%
April 80 Calls, Lockheed Martin
LMT, -1.52%
March 175 Calls, Caterpillar
CAT, -0.19%
March 105 Calls are attractively priced right now. In general, expect markets to pull back slightly before making another run at the highs set in December.

Tuesday: Pre-market open German GDP and French Business Climate figures are released, U.S. same-store sales at 7:45 a.m., and home prices are released at 9:00 a.m. At 10:00 a.m., investors will get information on consumer confidence, Richmond Fed Manufacturing Index and State Street Investor Confidence figures.

Wednesday: New-home-sales data is released

Thursday: Jobless claims, consumer-comfort Index, and the Kansas City Fed Manufacturing Index are released. Most influential will be Fed Chairwoman Janet Yellen Speech at 10:00 a.m.

Friday: U.S. fourth-quarter GDP revisions are released at 8:30 a.m., as well as Chicago PMI, Consumer Sentiment and pending-home sales.

Disclosure: Stocks mentioned are holdings in both separate accounts and MPDAX.

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